Rural communities – do their radio stations need government protection? The FCC seems to think so, proposing a series of new rules and policies that restrict the ability of the owners of rural radio stations to move their stations into Urban areas. These rules would make it harder for entrepreneurs to do “move in” applications – taking stations from less populated areas and moving them to communities where they can serve larger populations in nearby cities. The Commission states that it is making these proposals to attempt to live up to its obligations under Section 307(b) of the Communications Act to ensure a “fair, efficient and equitable” distribution of radio services to the various states and communities in the country. While this may be a noble goal, one wonders if it is a solution in search of a problem. Are there really rural communities that have an unmet demand for missing radio services – and which can economically support such services? And do these proposals conflict with other goals of the new Commission, by effectively decreasing the opportunities for minorities and other new entrants from acquiring stations in major markets – by taking away move-in stations that are often the only stations that these broadcast station owners can afford in urban markets?  These are questions that the FCC will need to resolve as part of this proceeding. 

A Section 307(b) analysis is done by the FCC when it faces conflicting proposals, specifying different communities of license, for new AM stations or requests for new FM allotments. It is also required when an applicant proposes to move a station from one community to another, as the applicant must demonstrate that the move to the new community would better serve the objectives of Section 307(b) than would the current location of the station. In the past, the 307(b)  analysis looks at several factors, or “Priorities.” These include:

 

  1. Service to white areas – when a proposed station will serve “white area,” an area where residents currently receive no predicted radio service (no “reception service” in FCC parlance). 
  2. Service to gray areas – when a proposed station will serve areas that currently receive only a single reception service
  3. Provision of a first local “transmission” service – where the proposed station will be the first station licensed to a particular community, and thus the first station that has the primary responsibility to serve the needs of that community
  4. Other public interest factors – usually meaning which proposal will provide the service to the most people (with service to “underserved areas,” i.e. those that receive 5 or fewer “reception services,” getting somewhat more weight).


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Last week, the FCC issued several fines to noncommercial broadcasters who had underwriting announcements that sounded too commercial.  In these decisions, the Commission found that the stations had broadcast promotional announcements for commercial businesses – and those announcements did not conform to the FCC’s rules requiring that announcements acknowledging contributions to noncommercial stations cannot contain qualitative claims about the sponsor, nor can they contain "calls to action" suggesting that listeners patronize the sponsor.  These cases also raised an interesting issue in that the promotional announcements that exceeded FCC limits were not in programming produced by the station, but instead in programs produced by outside parties who received the compensation that led to the announcement.  The FCC found that there was liability for the spots that were too promotional even though the station itself had received no compensation for the airing of that spot.

The rules for underwriting announcements on noncommercial stations (including Low Power FM stations) limit these announcements to ones that identify sponsors, but do not overtly promote their businesses.   Underwriting announcements can identify the sponsor, say what the business of the sponsor is, and give a location (seemingly including a website address).  But the announcements cannot do anything that would specifically encourage patronage of the sponsor’s business.  They cannot contain a "call to action" (e.g. they cannot say "visit Joe’s hardware on Main Street" or "Call Mary’s Insurance Company today").  They cannot contain any qualitative statements about the sponsors products or services (e.g. they cannot say "delicious food", "the best service", or "a friendly and knowledgeable staff" ).  The underwriting announcements cannot contain price information about products sold by a sponsor.  In one of the cases decided this week, the Commission also stated that the announcements cannot be too long, as that in and of itself makes the spot seem overly promotional and was more than was necessary to identify the sponsor and the business that the sponsor was in.  The spot that was criticized was approximately 60 seconds in length. 


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On Thursday, the Obama administration appointed FCC Commissioner Michael Copps to be the Acting FCC Chairman until the administration selects its permanent Chairman, and that person is confirmed by the Senate.  As we’ve written, the rumors are that the permanent Chair will be Julius Genachowski, a former classmate of the President.  But, as far as we know (and according to the White House website’s list of appointments made so far), that appointment has not yet been formally made and sent to the Senate Commerce Committee for the initiation of hearings on the qualifications of the nominee.  Commissioner Copps is the most senior of the remaining three Commissioners (Democrat Jonathan Adelstein and Republican Robert McDowell being the other two remaining Commissioners), and has been an outspoken advocate of more stringent regulation of the public interest performance of broadcasters (see, for instance, our posts here and here).  What will his appointment as interim FCC chairman mean for broadcasters?

Initially, it would seem reasonable to assume that the Acting Chair will be principally occupied with the DTV transition, as least for the next few weeks, and perhaps longer if the pending legislation to delay the transition deadline until June 12 is adopted.  It would also seem reasonable to assume that the Commission, at least for the short term, will not be tackling major regulatory initiatives (like the localism proceeding), until the permanent FCC Chair has taken office.  One of the initial Executive Orders that was issued by the Obama administration was to freeze the actions of administrative executive agencies until the political appointments made by the administration have been confirmed and taken their places, so that the new administration is not saddled by regulations that don’t fit with its overall political agenda.  While many in DC believe that this order does not apply to an "independent agency" like the FCC (which technically does not report to the administration, but instead to Congress), it would be reasonable to assume that the spirit of the order would be followed by the FCC.


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With Barack Obama’s historic victory just sinking in, all over Washington (and no doubt elsewhere in the country), the speculation begins as to what the new administration will mean to various sectors of the economy (though, in truth, that speculation has been going on for months).  What will his administration mean for broadcasters?  Will the Obama administration mean more regulation?  Will the fairness doctrine make a return?  What other issues will highlight his agenda?  Or will the administration be a transformational one – looking at issues far beyond traditional regulatory matters to a broader communications policy that will look to make the communications sector one that will help to drive the economy?  Some guesses, and some hopes, follow.

First, it should be emphasized that, in most administrations, the President has very little to do with the shaping of FCC policy beyond his appointment of the Commissioners who run the agency.  As we have seen with the current FCC, the appointment of the FCC Chairman can be the defining moment in establishing a President’s communications policy.  The appointment of Kevin Martin has certainly shaped FCC policy toward broadcasters in a way that would never have been expected in a Republican administration, with regulatory requirements and proposals that one could not have imagined 4 years ago from the Bush White House.  To see issues like localism, program content requirements and LPFM become such a large part of the FCC agenda can be directly attributed to the personality and agenda of the Chairman, rather than to the President.  But, perhaps, an Obama administration will be different.


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The FCC has scheduled a Summit on the Emergency Alert System ("EAS"), to be held on May 19.  The EAS system is the alert system used by broadcasters to pass on emergency information from government officials to their listeners.  EAS replaced the Emergency Broadcast System ("EBS") and was intended to be a more reliable substitute for the system originally adopted during the Cold War to convey a Presidential message about a nuclear attack or similar emergency to the entire country.  Over the years, the system has adapted to include information about local emergencies and "amber alerts" about the kidnapping or disappearance of children.  However, especially since 9-11 and some of the hurricanes in the South, questions have been raised about the effectiveness of the system, and means to make the distribution of emergency information more reliable and efficient have been sought.  The FCC currently has a rulemaking pending to determine ways in which that system can be made more efficient – a question sure to be addressed at the Summit.

In the current proceeding on reforming the EAS system, one of the questions that has been asked is how the system should be activated for non-Federal emergencies.  Obviously, the President can still activate the system for a national emergency, but how alerts about local emergencies are initiated is one of the more controversial issues in the proceeding.  Currently, there is no uniform system.  Instead, each state’s system may have different points from which an alert can be initiated.  Concerns have been raised that if the ability to initiate an alert is too broadly distributed, alerts may be initiated haphazardly, and if too many alerts are issued, the system will lose its impact and other important programming may be preempted unnecessarily.  Thus, proposals have been made that the alerts should be initiated only by a state’s Governor or his or her specifically designated representative. 


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Website operators who allow the posting of user-generated content on their sites enjoy broad immunity from legal liability.  This includes immunity from copyright violations if the site owner registers with the Copyright Office, does not encourage the copyright violations and takes down infringing content upon receiving notice from a copyright owner (see our post here for more information).  There is also broad immunity from liability for other legal violations that may occur within user-generated content.  In a recent case, involving the website Roommates.com, the US Court of Appeals determined that the immunity is broad, but not unlimited if the site is set up so as to elicit the improper conduct.  A memo from attorneys in various Davis Wright Tremaine offices, which can be found here, provides details of the Roommates.com case and its implications.

In the case, suit was filed against the company, alleging violations of the Fair Housing Act, as the site had pull-down menus which allowed users to identify their sex, sexual orientation, and whether or not they had children.  Including any of this information in a housing advertisement can lead to liability under the law.  The Court found that, if this information had been volunteered by users acting on their own, the site owner would have no liability.  But because the site had the drop-down menus that prompted the answers that were prohibited under the law, liability was found.


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At its December meeting, the FCC adopted a Notice of Proposed Rulemaking on Localism.  At that meeting, while the Commissioners discussed the generalities of the proposals being made, the specifics of the proposals were unknown.  The full text of the NPRM has now been released, and it sets out the areas in which the Commission proposes to re-regulate broadcast stations.  The order also hints at a number of other proceedings that the Commission intends to launch in the near future, and reminds broadcasters of a number of other existing proceedings that will potentially bring about greater regulation.  From the discussion in the NPRM, new rules will apply to all broadcasters – large and small – and potentially place significant burdens on all stations which, as always, are hardest for small stations to deal with.  Given the number of new regulatory initiatives discussed by the Commission, the NPRM is a must-read for all broadcasters, and this proceeding is one in which all broadcasters should participate.

Among the specific proposals on which the Commission asks for comments include the following:

Community Advisory Boards:  The Commission tentatively concludes that all stations will be required to establish a community advisory board to advise the station on the issues of importance to the community that can be addressed in the station’s programming.  The Commission indicated that it did not want to bring back the burden of the ascertainment process that was abolished in the 1980s, but asks how the Board should be established so as to represent the entire community, suggesting that the categories of community leaders that were used in the ascertainment process could be used as a standard to guide the licensee in determining the make-up of the board.  Other questions include how often the board should meet, and how the board members should be selected (or elected – though by whom, the Commission does not suggest).

Other Community Outreach Efforts.  The Commission also suggests that other community outreach efforts should be considered as possible mandates for broadcasters.  These would include the following:

  • Listener surveys by telephone or other electronic means (general public surveys were also part of the ascertainment process abolished in the 1980s, so if this were adopted together with the Community Advisory Board, ascertainment would effectively be back)
  • Focus sessions or town hall meetings
  • Participation of management personnel on community boards, committees, councils and commissions (mandatory civic participation?)
  • Specific phone numbers or email addresses, publicized during programming, for the public to register their comments on station operations.

Remote Station Operations.  Comments are sought as to whether television stations should be forbidden to operate without being manned during all hours of operation.  Radio operations will be addressed in the proceeding to consider the public interest issues posed in the Digital Radio Proceeding (see our summary here).

Quantitative Programming Guidelines.  The Commission proposes to adopt quantitative standards for programming that a station would have to meet to avoid extra processing and scrutiny at license renewal time.  Questions include what categories of standards should be established (just local programs – or more specific requirements to set required amounts of news, public affairs and other categories – and how to define what programming would qualify in each category), should requirements be established as specific numbers of minutes or hours per day or per week or by a percentage of programming or through some other metric, should other specific requirements or measurements be established?

Main Studios.  The commission suggests reverting to the pre-1987 requirement that each station maintain a main studio in its community of license

Network Programming Review.  The Commission asks whether rules should be adopted to require that local network affiliates have some ability to review all network programming before it is aired.  If so, what programs would be exempt from the requirement (e.g. live programs), how much prior review is necessary, would such a right disrupt network operations?

Voice Tracking.  The Commission asks if "voice-tracking," (i.e. a radio announcer who provides announcing on a radio station from outside a local market, sometimes including local inserts to make it sound as if the announcer is local) should be limited or prohibited, or if disclosure should be required.

Local Music.  While the Commission indicates that it did not think that a ban on national playlists was required, it did ask whether broadcasters should be required to report the songs that they play, and how they choose their music.  With that information, the Commission asks if it should consider the amount of local music played when assessing whether a station has served the needs of its community at license renewal time.

Class A TV.  The Commission asks whether it should adopt rules that permit more LPTV stations to achieve Class A status, meaning that they would no longer be secondary stations subject to being forced off the air by interfering uses of the TV spectrum by full-power TV stations.

 


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The FCC’s Emergency Alert System ("EAS") is the bane of many broadcasters.  Failing to have operational EAS equipment, or otherwise failing to comply with the requirements of the rules, including failures to conduct the mandatory tests of the system, are among the most common causes of a fine following an FCC field inspection.  To help ensure compliance with the EAS

As the Commission held its last localism hearing in Washington on Halloween night, FCC Chairman Kevin Martin’s views on how the FCC should insure that stations are responsive to their communities became somewhat clearer.  In his opening statement, the Chairman outlined a set of actions that could be taken by the FCC to insure more service to the public.  While emphasizing the importance of efforts to encourage new entrants into broadcast ownership, the Chairman’s proposals to add new regulatory requirements, including requiring that a station be manned during all hours of operation, may well have the result of making it more difficult for any new entrant (or for existing smaller operators) to profitably operate their stations.  In addition, he has offered proposals that would seemingly require cable and satellite carriage of in-state television stations not in a system’s DMA – a proposal sure to cause concern to stations in DMAs that straddle state lines.

The Chairman’s statement includes the following proposals:

  • Requirements for uniform filings by broadcasters quantifying their public service – presumably their news and information programming and the public service announcements that they provide
  • Requiring that stations have manned main studios during all hours of operations (not just during business hours)
  • Allowing flexibility for LPFM stations to be sold, but adopting new rules to insure that such stations are used for local programming, not something provided from a network or other programming source
  • Providing television viewers the ability to get an in-state television stations on cable and satellite even if the county in which they reside is "home" to a DMA with stations in another state
  • Capping the number of applications accepted from the 2003 FM translator filing window – which might result in the dismissal of hundreds of applications that have effectively been frozen for 4 years


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